Economy & Jobs

Right-to-work laws were established in the 1940s so that no American worker would be compelled, as a condition of employment, to join, not join, or pay dues to a labor union. A state’s stance on these favorable labor laws or forced unionization can affect jobs, wages, and the overall state economy. Here’s some background on both positions.

History of Union Labor Laws

The National Labor Relations Act of 1935, more popularly known as the Wagner Act, guarantees workers the right to self-organize and collectively bargain. However, this act’s favoring of unions allowed for the creation of union shops, in which all employees must become union members within a certain time frame; closed shops, in which employees must become union members as a condition of employment; and agency shops, in which employees do not have to join a union but do have to pay dues. Employees could be terminated for not paying union dues and/or not complying with union rules, even if their job performance was satisfactory.

In 1947, Congress passed the Labor Management Relations Act, also called the Taft-Hartley Act, which repealed some sections of the Wagner Act and placed restrictions on union power. Closed shops were made illegal, and individual states gained the right to outlaw employment policies requiring union membership or payments to a union. These are known as right-to-work laws.

The remaining 25 states still allow for forced-union policies. Unions in these states can require employees to pay dues in exchange for negotiating contracts with employers regarding wages, benefits, working conditions, and other labor concerns. Workers cannot be forced to join, but they may still have to pay a fee to the union. The goal of this type of rule is to prevent non-union-member employees from receiving union benefits for free. Employees can claim an exemption on paying dues based on religious or moral grounds, but they may still be required to pay for union services such as collective bargaining, grievance processing, or contract administration. They may also be required to make a payment to a nonlabor charity organization in lieu of union dues.

Benefits of Favorable Labor Laws

Proponents of unionism argue that labor unions provide safer workplaces and better wages and benefits for workers, but that isn’t always the case.

“Wealth of States” reveals that between 2002 and 2012, the growth differential in personal income was 12.8 percentage points higher in right-to-work states than forced-union states. Gross state product growth also performed 13.7 percentage points higher (p. 91–92). The Mackinac Center for Public Policy notes that between 2001 and 2006, jobs creation was two times greater in right-to-work states as opposed to forced-union states.

States that impose fewer labor restrictions therefore seem to be more worker and business friendly, and other states are taking note. Indiana and Michigan, for instance, only recently adopted right-to-work statutes in 2012, with the goals to increase job growth and prevent industries from moving to states without forced unionization.

Right to Work Does Not Eliminate Unions

Contrary to the belief of some organized labor supporters, right-to-work laws do not eliminate unions. They simply make it illegal for unions to force workers into membership or payment to keep a job. If unions want to maintain voluntary membership, they have to show the value of their services and make efforts to control costs.

Does the average American prefer right-to-work laws over forced unionization? Based on findings from a Gallup poll released in August 2014, the answer is yes. Just over half of Americans still favor unions, but 7 in 10 consider the personal freedom offered through right-to-work laws more important.